Companies post double-digit quarterly earnings

BY DAN SEWELLTHE ASSOCIATED PRESS

Wednesday

Jan 31, 2007 at 12:01 AM

CINCINNATI - Boosted by new products from familiar brands and growth in emerging markets, consumer products makers Procter & Gamble Co. and Colgate-Palmolive Co. posted double-digit quarterly earnings increases Tuesday and offered bright outlooks.
"We are now in the best position we have ever been of stuff coming along to help our gross profit," Colgate-Palmolive Chief Executive Reuben Mark said in a conference call with investors. The company said it has a full pipeline of new products around the world and expects double-digit earnings per share growth for the year ahead.
The New York-based maker of toothpaste, soaps and Science Diet pet food said fourth-quarter profit rose 11 percent as revenue increased across divisions.
Cincinnati-based P&G said its profit jumped 12 percent in the second quarter of its fiscal year and raised its outlook for the year.
The company cited the strong quarter and progress in its integration of the Gillette Co., with the Blades & Razors division contributing an 11 percent sales increase led by the year-old Gillette Fusion. The company also reported good sales of new products such as Tide Simple Pleasures detergent, Febreze Noticeables air fresheners, Olay Definity skin cream, Crest Pro Health toothpaste and additions to the Swiffer duster line.
"We have been working for six or seven years now to build a robust innovation and initiative portfolio," A.G. Lafley, P&G's chairman, president and chief executive, told analysts. "Every year we have built the size, we have built the strength and we have built the success rate of this innovation portfolio."
The company is delighted with the Gillette Fusion razor, which it showed off during last year's Super Bowl telecast. The five-blade razor system has already racked up $400 million in North American retail sales, is off to a strong start after later launches in England, Germany and Japan, and is being rolled out in markets including Australia and eastern Europe, P&G said.
A Fusion Phantom razor and a Venus Breeze female shaver with built-in gel are being launched in North America.
Meanwhile, Colgate-Palmolive plans to launch Colgate Total Advanced Clean, which will begin shipping at the end of February. The company's leading share of the U.S. toothpaste market grew to 37.3 percent last year led by sales of Colgate Total, according to data from ACNielsen.
New products introduced in the United States include Colgate Luminous Mint Twist toothpaste, Colgate 360 degree toothbrush, Irish Spring MoistureBlast bar soap and Fabuloso multi-purpose spray cleaner.
Colgate-Palmolive said international sales grew, including a 14 percent revenue growth in Latin America. Chief Operating Officer Ian Cook said market share for toothpaste improved in countries including Mexico, Brazil, India, Britain and Russia.
Cook will take over as CEO sometime this year and Mark will remain as chairman for an undisclosed period of time, Mark said Tuesday.
Lafley said P&G had double-digit sales growth in developing markets and sees strong potential.
"We remain pretty bullish on developing markets," Lafley said.
For the quarter ended Dec. 31, P&G posted net income of $2.86 billion, or 84 cents per share, versus $2.55 billion, or 72 cents per share, in the prior-year period. Revenue grew 8 percent to $19.73 billion from $18.3 billion a year ago.
Analysts surveyed by Thomson Financial expected earnings of 83 cents per share on $19.57 billion in revenue.
For the year, the company projects earnings of $2.99 to $3.03 per share, up slightly from its October forecast of $2.97 to $3.02 per share. The forecast includes the impact of P&G's $57 billion Gillette acquisition in 2005, which the company estimates will come in at the lower end of its guidance for 12 cents to 18 cents per share.
P&G shares, which recently have traded at all-time highs, slipped 24 cents to $64.62 in late trading on the New York Stock Exchange. They reached an all-time high of $66.30 on Jan. 19, up from a 52-week low of $52.75 in June.
Colgate-Palmolive's earnings rose to $401.2 million, or 73 cents per share, in the fourth quarter compared with $361.2 million, or 65 cents per share, a year ago.
Excluding charges related to a restructuring plan, as well as stock-based compensation expenses, Colgate-Palmolive reported earnings of $436.9 million, or 80 cents per share. Colgate absorbed $65.1 million in after-tax charges related to its restructuring program in the fourth quarter, the company said in a statement.
Analysts polled by Thomson Financial had forecast earnings per share of 77 cents on revenue of $3.1 billion. Revenue rose 10.5 percent to $3.2 billion from $2.9 billion a year ago.
Colgate-Palmolive shares rose 79 cents to $67.50 in late trading on the NYSE, near its 52-week high of $68.03. The shares have traded as low as $53.56 in the past year.
EARNINGS REPORTS
A glance at Tuesday's earnings reports by consumer products makers Procter & Gamble Co. and Colgate-Palmolive Co.:

For second fiscal quarter, ended Dec. 31 - Net income of $2.86 billion, or 84 cents per share, versus $2.55 billion, or 72 cents per share, in the prior-year period. Revenue grew 8 percent to $19.73 billion from $18.3 billion in the year-ago quarter.
First six months of fiscal year - Earnings of $5.6 billion, or $1.63 a share, from $4.6 billion, or $1.48 a share, a year ago. Revenue grew 16 percent to $38.5 billion from $33.1 billion.
Looking ahead - The company projects full-year earnings of $2.99 to $3.03 per share. Total sales for the year are now expected to grow by 10 percent to 12 percent, implying sales of $75.04 billion to $76.41 billion. Analysts expect the company to post earnings, on average, of $3.02 per share on $75.72 billion in revenue.

Fourth quarter - Net income rose to $401.2 million, or 73 cents per share, from $361.2 million, or 65 cents per share, a year ago. Revenue rose 10.5 percent to $3.2 billion from $2.9 billion. Excluding charges related to a restructuring plan and stock-based compensation expenses, the company earned $436.9 million, or 80 cents per share.
Full year - Profit of $1.35 billion, or $2.46 a share, on $12.24 billion in revenue, from 2005 profit of $1.35 billion, or $2.43 a share, on sales of $11.4 billion. Excluding special charges, full-year 2006 profit was $1.65 billion, or $3 a share, compared with $1.47 billion, or $2.64 a share, in 2005.
Looking ahead - The company expects improved gross margins, strong revenue growth and double-digit earnings per share growth in the year ahead.
Source: Procter & Gamble Co. and Colgate-Palmolive Co.

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